The Northeast States for Coordinated Air Use Management (NESCAUM) is set to release a framework for a low-carbon fuel standard pending the completion of an economic analysis, which could happen as early as this month. According to a stakeholders document (pdf) obtained by Greenwire, the plan could look similar to one already in place in California that requires companies that import or produce fuel to reduce their greenhouse gas emissions.

The draft plan says the states are considering a reduction target of between 5 and 15 percent over a period of 10 or 15 years, although the baseline measure is still under consideration. According to the framework, it's possible the reduction targets will be backloaded to give stakeholders more time to prepare for the plan.

The plan would also create a credit system for companies that produce or import fuels below the carbon intensity targets, which could include some liquid biofuels, electricity, hydrogen or natural gas. The calculation of carbon intensity would include upstream and indirect emissions as calculated by the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model, similar to the California program.

According to Andrew Dick, an environmental analyst with NESCAUM working on the fuel standard, the document reflects internal discussions among stakeholders, and a formal framework would not be released until researchers had completed an economic analysis. NESCAUM had originally planned to release the draft framework in early 2011, but that schedule has been put on hold.

A note on the document -- dated February 2011 -- states that it "does not reflect a consensus position of the participating states and is not intended to limit ongoing discussions of program options or preclude new options from being considered."

Dick said the timeline on the LCFS was "dictated by state consensus," adding that several of the member states had previously worked together on the Regional Greenhouse Gas Initiative.

The governors of the 11 states participating in the LCFS -- Delaware, Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont -- signed a memorandum of understanding in December 2009 to advance the program. The participating states have been holding stakeholder meetings with the intention of releasing a draft framework this year for further consideration.

Massachusetts had been eyeing a similar plan and could advance its own proposal. U.S. EPA has also been considering its own LCFS.

California enacted its own fuel standard last year that requires fuel suppliers to reduce fuel emissions by 10 percent by 2020. That program has encountered some resistance because of its life-cycle analysis for certain fuels, as well as concerns about the cost of fuels.

Michael Whatley, vice president of the Consumer Energy Alliance, said the NESCAUM document showed that the Northeast program could meet the same resistance. Whatley, whose group represents sectors from oil to chemicals to fuel users such as grocers, said the program could lead to a rise in gas and diesel prices without a viable alternative.

"If you set up a reduction program that is going to try to get you a 10 percent [carbon intensity] reduction over 10 years, that's not achievable without a dramatic shift in fuel use," said Whatley, whose group has argued against similar programs. "Even NESCAUM says you would need to have several million natural gas vehicles to get that reduction in 10 years. That's just not feasible. The same goes for electric cars."

Supporters say the LCFS is an effective way to encourage fuel providers and users to use the market to determine a more environmentally friendly fuel source.